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Sir Keir Starmer refused to repeat his manifesto pledge to make Britain the fastest growing economy in the G7, as a new report suggested the US and Canada were outstripping the UK.
Asked by Conservative leader Kemi Badenoch to confirm the pledge on Wednesday, Starmer told MPs the UK was on track to be Europe’s fastest-growing major economy in the next two years, but stopped short of repeating the G7 line.
Instead, the prime minister is expected to set an economic target on Thursday that focuses on increasing household disposable income over this parliament as part of a wider political reset.
To try to stimulate growth, Starmer is seeking to attract investment to the UK from countries whose human rights records he has previously criticized, including China and Qatar – whose leaders he met in Downing Street on Wednesday.
The OECD predicted on Wednesday that the US will be the fastest growing member of the G7 next year with GDP growth of 2.4 percent, while Canada will be close behind with 2 percent growth.
That puts them both ahead of the UK, which is forecast to grow by 1.7 percent in 2025 and 1.3 percent in 2026, according to the OECD’s latest economic outlook report. Although lagging behind its transatlantic rivals, the UK will outperform other European members France, Italy and Germany.
The UK’s economic growth rate will also fall behind the US and Canada in 2026, the OECD predicts.
After refusing on Wednesday to repeat Labour’s pledge to outperform other G7 economies, Badenoch accused Starmer of moving the goalposts by setting a new economic target based on household disposable income, in an “emergency reset five months into the prime minister’s term”.
Downing Street said Starmer remained faithful to the commitments made in the G7 manifesto.
Badenoch also noted that the OECD had called on the UK to continue building tax reserves to strengthen public finances, despite Chancellor Rachel Reeves telling a CBI conference last month: “I’m not going to come back with more borrowing or more taxes. “
Elsewhere, Starmer spoke to Qatar’s emir about boosting economic cooperation, including Qatar’s £1 billion investment in climate technology. Talks also focused on genomics, defense and an agreement to develop closer financial ties.
Starmer, as the leader of the opposition, refused to attend the 2022 World Cup in Qatar because of the human rights record in the Gulf state.
Downing Street said Starmer visited Qatar in 2023 on an official visit. “I don’t accept that he boycotted Qatar,” the spokesman said, adding that human rights issues were always raised in meetings with world leaders.
Like the previous Tory administration, the Labor government is seeking to attract investment from the oil-rich Gulf to support its growth ambitions.
Starmer hosted Qatari Emir Sheikh Tamim bin Hamad al-Thani on a state visit to the UK this week, two years after Doha pledged to invest £10bn over five years in the UK as part of a “strategic investment partnership”.
Mohammed Al Sowaidi, chief executive of the Qatar Investment Authority, the Gulf state’s sovereign wealth fund, told the Financial Times that the partnership had gone “extremely well”, adding that “we are operating comfortably in the (five-year) timeframe that we had in mind”.
QIA’s investments as part of the deal included businesses in utilities, such as Severn Trent, sustainable energy, technology and artificial intelligence.
“We have a systematic program and are generally optimistic about growth in the UK,” he said.
This weekend, Starmer will begin a visit to the United Arab Emirates, which has a similar investment agreement with the UK that is fully implemented, and Saudi Arabia.
As well as seeking investment in the UK, the government is also negotiating a trade deal with six members of the Gulf Cooperation Council – Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.
